June 21 (Bloomberg) -- Fitch Ratings said U.S. lawmakers
are “very likely” to raise the debt ceiling limit before Aug.
2, even as it reiterated that failure to do so would result in
the country being placed on rating watch negative.

“The U.S. Treasury is saying that if the debt ceiling is
not raised by Aug. 2, then they can’t guarantee that they will
remain current on their obligations,” Andrew Colquhoun, head of
Fitch’s Asia-Pacific Sovereigns team, said in an interview in
Singapore today. “If the debt ceiling has not been raised by
then, then we would put the U.S. sovereign ratings on rating
watch negative. We think it’s very likely that the debt ceiling
will be raised in good time.”

Treasury Secretary Timothy F. Geithner has warned that a
failure to increase the $14.3 trillion debt ceiling by Aug. 2,
the date he projects borrowing authority would be exhausted, may
have catastrophic effects on the U.S. economy by sharply raising
borrowing costs. Republicans are using the debt-ceiling talks to
press for cuts in government spending.

Fitch rates U.S. sovereign debt AAA, the highest investment
grade. Moody’s Investors Service said on June 2 that it expects
to place the U.S. government’s top credit rating under review
for a possible downgrade if there’s no progress on increasing
the debt limit by mid-July. In April, Standard & Poor’s put the
U.S. government on notice that it risks losing its AAA credit
rating unless policy makers agree on a plan by 2013 to reduce
budget deficits and the national debt.